Better times are ahead for Maxtor Peripherals, the once troubled hard drive manufacturer having relaunched itself with a new range of products and a new modular manufacturing facility.
Since Hyundai's full acquisition of Maxtor last year, the company has been given the financial backing and management skills to pull itself out of trouble.
Mass lay-offs last year at its plants in Thailand, Singapore and Korea saw the consolidation of Maxtor's manufacturing operations into a completely revamped factory in Singapore.
Under Hyundai's directive, a modular manufacturing process based on the Japanese Kan Ban method was implemented, and the factory now has a potential production capacity of four million drives per quarter.
Bob Brown, vice president of regional engineering, said costs and inventory have been cut, while productivity has increased three-fold as a result.
"We are driving towards being the best, most cost-efficient hard drive plant in the industry by the end of the year," he said.
According to Brown the quality of Maxtor's drives has also taken a turn for the better. The defective parts per million (DPPM) rating for Maxtor drives has decreased dramatically from 60,000 in January 1996 to less than 700 DPPM in January this year.
All factory staff were retrained for the highly controlled production processes, which involve small teams of workers who are held directly accountable for the quality of the drives they produce.
The modular processes enable Maxtor to chop and change between models, allowing Maxtor to quickly meet market demands in capacity, Brown said.
Phillip Adams, the director of the company's Australian presence Maxtor Disc Drives, said Maxtor's highest growth rate and market share in the Asia-Pacific region is in the Australian market, its sales coming second to Maxtor Korea.
He said the Australian market is more concerned with performance than other factors. "The Australian market is focused on what the average seek time is. We've had a perception problem in the past regarding the performance of our drives and now we have a drive that's considered one of the fastest in the industry," Adams told ARN.
"The only way we are going to turn around the perceptions of our products is if they perform. And at the moment it's only the Maxtor DiamondMax and the IBM Deskstar that are the best performers in the industry - every other drive is a good 15 percentage points lower in performance than our drives," he said.
Adams said capacity trends are driven pri- marily by vendors reaching for the correct price points for individual markets. "The actual secret behind the whole matrix of what capacity will be at a given point of time is really not determined by capacity points at all, it's determined by who is setting the pace in the industry as related to areal densities," said Adams.
"A hard drive by the major manufacturers shouldn't constitute more than 10 per cent of the cost of the PC, and the particular market price is always benchmarked in the US.
"World-wide, the hard drive sweet spot is $US180. What is hitting that mark at the moment are capacities between 1.7Gb and 2Gb and that will soon change."
According to Maxtor's capacity road map, across the industry the largest volume capacity point that will be manufactured in June is 2.1Gb, and in November, 2.5Gb.
The road map for the high end indicates that by the end of the year manufacturers will be targeting 8.4Gb.
Adams is confident Maxtor will at the least have a 7Gb 3.5in enhanced IDE drive on the market by December.
He said Maxtor's strategy is focused on putting the highest capacity on a disc: "That's really why we're going all MR (Magneto Resistive) head technology after the CrystalMax 1080 which we have just released." Maxtor's DiamondMax range already utilises MR head technology.
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